Zambia Headed For Africa’s First COVID-related Debt Default

ZAMBIA has asked investors in its US dollar bonds to accept delays in their interest payments into next year, in what would be the first African debt default on private creditors since the pandemic.

President Edgar Lungu’s government said on Tuesday that it was seeking “the suspension of debt service payments for a period of six months” from holders of its $3bn worth of international bonds, beginning in October.

The country first tapped international bond markets in 2012, at a time when its fast-growing economy and investors’ hunger for high-yielding dollar assets allowed it to borrow more cheaply than Spain. Further sales followed in 2014 and 2015 amid a post-financial crisis boom for bond issuance by African governments.

But Tuesday’s proposal leaves investors — including holders of the original $750m 10-year bond — facing losses. Even before the pandemic hit the continent, Africa’s second-biggest copper producer was battling to control